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Name one country that is more diverse ethnically and/or economically than the United States of America and I'll gladly hand over ALL the money in my savings account right now.
Posted on: 2008/12/21 4:37
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the US economy is) and I am not sure that diversity by itself necessarily is an advantage, or that much of an advantage.
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Dusted, you're depressing. And probably right. =( Long term, I'm bullish on the U.S.A. If one was to look at the U.S. as a corporation, one could see that we have two key UNIQUE strategic advantages compared to other countries: unmatched diversity and unmatched freedom. These powerful forces tend to overcome any handicaps over the long term. But in the short to mid term.... could we be looking at a stock market ala 1965-1975? ala 1997 - 2007? http://finance.yahoo.com/echarts?s=%5EGSPC#chart1:symbol=^gspc;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Posted on: 2008/12/20 5:37
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Unfortunately, I believe you're right. We've been undertaxed for the past 30 years or so. This isn't opinion, it's fact. One doesn't need any deep understanding of economics to understand that the corollary to this undertaxation is that all the money we made all the "productivity increases" of the past 30 years weren't quite what they seemed to be. Much of the productivity increases were real; we're not gonna have wide spread hunger or be wearing rags anytime soon. But the inflated value of assets such as stocks and homes were simply a mirage. The value of the dollar is similarly unsustainable. The only thing(s) that can dig us out of this ditch is (are) new technology(ies) which increase efficiency and/or develop new markets for goods and services. We need another breakthrough(s) on the order of the internet, the computer or the internal combustion engine. Until then: stagflation.
Posted on: 2008/12/20 5:22
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How to Bail Out General Motors
Imposing tough conditions would improve the odds of success and discourage many other firms from seeking costly government handouts.
Robert J. Samuelson
NEWSWEEK
So it's come to this: General Motors, once the world's mightiest industrial enterprise, is now flirting with bankruptcy. Ford and Chrysler may not be far behind. Car and truck sales have collapsed. GM is rapidly exhausting its cash reserves and may soon be unable to pay its bills. Here's the dilemma: GM and other U.S. automakers ought to be rescued to minimize damage to the economy, but the rescue should require tough conditions that neither the Democratic Congress nor the incoming Obama administration seems willing to support.
In a booming economy, a GM bankruptcy might be tolerable and useful. It would remind everyone of the social costs of mediocre management and overpriced unionized labor. But far from booming, the economy is declining at an apparently accelerating rate. Confidence among small businesses has dropped to a 28-year low, according to a survey released last week by the National Federation of Independent Business.
No one knows what further havoc a GM bankruptcy might inflict. A study by the Center for Automotive Research (CAR) estimates that 2.5 million jobs would be lost in the first year. The logic: if any of the "Big Three" went bankrupt, many suppliers would also fail; because car companies share suppliers, all U.S.-based manufacturers would suffer crippling parts shortages. American production would virtually stop until new supplier arrangements emerged. "It takes 6,000 to 14,000 parts to make a vehicle," says Sean McAlinden, CAR's chief economist. "If you don't have one, you can't make it."
This may be too pessimistic. In a Chapter 11 bankruptcy, GM would "reorganize." It would suspend many existing debt payments and continue normal operations. Perhaps. The snag is that even in "reorganization," GM would require new loans and these might not be available. "Historically, when companies go bankrupt, there's 'debtor in possession' financing?investors lend you money, but they get repaid first. That market has evaporated because of the credit crunch," says auto analyst Rod Lache of Deutsche Bank. No loans, no production. Another possible pitfall: worried about warranties and service, customers might shun a bankrupt GM's vehicles.
Why run these risks when the 6.5 percent unemployment rate seems headed toward 8 percent and almost a quarter of the 10 million jobless have been out of work for six months or longer? Just to satisfy a purist "free market" ideal? It doesn't make sense. But neither does it make sense simply to heave taxpayers' money at automakers. The objective is not to rescue the companies or workers; it is to shore up the economy and improve the U.S. industry's competitiveness. A bailout won't succeed unless other things also happen.
First, auto companies' existing creditors need to write down their debts. Even with federal aid, companies will shrink. Economist McAlinden estimates that the country has surplus assembly capacity of about 4 million vehicles, much owned by the Big Three and destined to be shut. GM will need a $25 billion government loan to get through the recession and cover closing costs, says Lache. But GM already has $48 billion of debt. Unless the old debt is sharply written down, GM would be overburdened and its rendezvous with bankruptcy would merely be delayed. Already, shareholders are essentially wiped out.
Second, labor costs need to be cut. By Lache's estimates, GM's hourly compensation?wage plus fringe benefits?totaled $71 in 2007 compared with Toyota's $47. Health benefits for retirees (many in their 50s, having retired after 30 years) are expensive. These costs contributed to GM's massive cash drain, $31 billion since 2005. But the United Auto Workers opposes making concessions. Just the opposite. Government aid, says UAW president Ron Gettelfinger, is needed "so that auto companies can meet their health-care obligations to more than 780,000 retirees and dependents." The bailout should be more than union welfare.
Finally, automakers need a consistent energy policy. Congress demands that companies produce more fuel-efficient vehicles (35 miles per gallon by 2020, up from 25mpg now). But politicians also want low gas prices. These goals are contradictory. To encourage consumers to buy fuel-efficient vehicles, Congress should mandate higher gas prices. Gasoline taxes could be raised gradually (say a penny a month for four years, possibly offset by other tax cuts). Wild swings between low and high fuel prices have crippled the U.S. industry by erratically shifting buyer preferences?to and from SUVs.
In bankruptcy, a judge can modify a firm's labor contracts and debts. GM needs the benefits of bankruptcy without the uncertainties, but the political process?so far?resists that desirable bargain. The conditions that Democrats seem to be discussing are mostly rhetorical gestures against high executive compensation (already limited) and in favor of more fuel efficiency (already legislated). The lame-duck Bush administration hasn't helped the conversation. It rejects additional assistance without saying why; if aid is forthcoming, it doesn't suggest what might be useful conditions.
We are now seeing the first political side effects of the open-ended $700 billion rescue of financial institutions. With so much money going to so many recipients, boundaries and rationales need to be established. When is public intervention justified? Who deserves support and why? Otherwise, political firepower will increasingly rule. The reason for imposing tough conditions on the auto industry is not only to improve the odds of success, but also?by the sacrifices required?to make the process sufficiently unpleasant so that countless other companies and unions won't demand similar handouts. In 1979, when it rescued Chrysler from bankruptcy, the Carter administration insisted on concessions from management, investors and labor. We should do as much or more.
http://www.newsweek.com/id/169162
Posted on: 2008/11/19 22:22
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From our favorite "crypto-commie" rag:
Saving Detroit From The Economist print edition Politicians, business and the unions all want a bail-out of Ford and General Motors. That would be a mistake DETROIT is running on empty. General Motors and Ford announced on November 7th that they had burnt their way through a total of nearly $15 billion of their precious spare cash in the third quarter. GM is on course to run out of money early next year; Ford a little later. Chrysler, 80% owned by Cerberus Capital, a private-equity firm, is less open about its suffering. But most people think it is already roadkill (see article). Across American industry, politics and labour, rarely have so many been so united: Detroit needs saving. The carmakers think they need $50 billion of taxpayers? support to see them through. At a time when the government is throwing more than $1 trillion at the financial system, isn?t that only fair? Indeed, if it saves millions of jobs isn?t it a bargain? You never know, the state?s investment might even turn a profit. Bailing out Detroit would be a bad use of public money. It would be bad in principle, because it would be an open invitation to companies everywhere to apply for aid to survive the recession. Banks qualify for help because the entire economy depends upon their services. They are vulnerable to sudden collapses in confidence that can spread to other banks that are perfectly solvent. A good car company does not face the same threat. And although Detroit employs a network of suppliers, which would suffer if production shuts down, nothing would sap a recovery and job-creating enterprise like locking up badly used resources in poorly performing companies. America?s carmakers accept the principle, but they argue that in practice they too are a special case. After years of cutting capacity and renegotiating their costs with the unions, the carmakers argue that they are within a whisker of better times: with one last shove from the taxpayer, it will be alright. There is something to this?but not because of what is happening in America. As our special report explains, the global car industry is shifting from the saturated markets of rich countries to the huge potential of fast-growing emerging markets. As recently as 2005, America bought 10m more cars than the total of the BRICs?Brazil, Russia, India and China. This year, sales of cars in the BRICs should overtake those in America. Despite slower economic growth in emerging markets, there are reasons to think car sales will remain strong. America has nearly one car for every person of driving age; China has fewer than three cars for every 100 people and India fewer still. Once people have a roof over their heads, meat on the table and a good job, the next thing they want is a set of wheels. In the next 40 years, the world?s fleet of cars is expected to increase from around 700m today to nearly 3 billion. Some greens and pedestrians may find that a terrifying prospect. But for today?s embattled carmakers it is an extraordinarily exciting one?and that includes the giants from Detroit. GM has been as nimble abroad as it has been flat-footed at home, an early-mover in China, Brazil and Russia, it holds strong positions in all three markets. Ford is not far behind. The next Chapter But is that justification for a bail-out? Not at all. The United States created Chapter 11 precisely to help companies that need protection from their creditors while they restructure their liabilities and winnow out the good business from the bad. If the North American businesses of GM and Ford filed for Chapter 11, their activities elsewhere would be largely unaffected. Even in North America, their businesses could continue to make vehicles as they shed costs and renegotiated contracts. The carmakers retort that being in Chapter 11 will poison their business. Buying a new car is a long-term gamble on there being dealers, spare parts and a thriving second-hand market for your vehicle. Drivers overwhelmingly tell surveys that they would not take the risk when Mercedes and Toyota make perfectly good alternatives. But $50 billion is a lot to stake on a hunch. A wiser bet is that whatever consumers say today, the stigma of being in Chapter 11 would fade, obscured by price cuts, advertising and most of all news that the car companies were tackling their remaining problems. Remember that, in many ways, Chapter 11 is more stable and predictable than depending upon the government. That is an unpopular message. It is almost certain to be ignored by Congress, which is itching to ?save jobs? and to counter the public-relations disaster of bailing out Wall Street. If the state is determined to keep the industry out of Chapter 11, it should set up a special fund and demand preferred equity to deter shareholders in other industries from asking for money. But it would still do better to let the car firms fail.
Posted on: 2008/11/19 22:13
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I personally believe that democracy is the best form of government in the world. However, I do not mistake this belief to mean that it is without flaws. One flaw is that in a democracy, it is often hard to sell long-term plans to the electorate. Some of the things that are the least politically-charged are ironically the hardest things to get done simply because there is no benefit to doing them now. e.g. gas tax, reducing the federal debt.
Somehow, this has to change.
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From Money Magazine:
Al Gore put global warming into the family dinner conversation; now David Walker, former U.S. Comptroller and the star of "I.O.U.S.A.," a documentary about our ballooning national debt, says that if we don't face up to our fiscal problems, the U.S. could go broke.
Among his possible solutions: reforming the tax system and reducing health-care spending.
Question: Just how bad are things?
Answer: Even worse than advertised. Everyone talks about this year's deficit, which is $455 billion. And the national debt, the accumulation of all our past deficits over the years, recently passed $10 trillion.
But the real problem is the nearly $41 trillion in unfunded promises and off-balance-sheet obligations.
Q. What are those?
A. Specifically, $7 trillion attributable to Social Security and $34 trillion for Medicare.
Q. But we had a surplus a few years ago. What happened?
A. In 2002, Congress failed to extend the budget controls that were in place in the '90s that helped take us from deficit to surplus.
Since then, Washington has been totally out of control. We have unfinanced war costs, a new Medicare prescription drug benefit, unfinanced tax cuts and now the bailouts.
Q. But sometimes you have to go into debt, right?
A. Individuals do that, and when they pass away, the debts go with them.
But government debts stay, and they have to be assumed by our children and grandchildren. That's not only fiscally irresponsible; it's morally reprehensible.
Q. How can we lower the debt?
A. Younger people and those who are middle or upper income will see a reduction in their Social Security benefits. We also need to encourage people to work longer.
And we have to reform health care. Even countries that have socialized medicine limit what they'll spend. There could be universal coverage for basic care.
Those who want heroic measures will be on their own. We are also going to need more revenue - taxes. Over time, I think we're going to see an income tax with fewer deductions and tax preferences, but that keeps rates low.
Q. All that doesn't sound like it will be politically popular.
A. True. That's why I support the creation of a bipartisan fiscal future commission that would make a range of budget, entitlement, spending and tax reform recommendations to the next President and Congress for an up-or-down vote.
We need to do the right thing for America's future, and that means enduring some degree of shared sacrifice today.
http://money.cnn.com/2008/11/17/pf/sc ... tm?postversion=2008111809
Posted on: 2008/11/19 21:26
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re: "big 3" bailout
Just another thought: Many countries aid their auto companies in various ways because they believe it is in their country's best interest to build/maintain auto-manufacturing capabilities. China's ambitions in auto manufacturing are naked. Japan protects their industry from competition domestically. Korea has a history of assisting their auto industry. I believe France and Italy have a history of aiding their auto manufacturers as well. The one big example of a nation letting go of auto manufacturing is the U.K. If there is one precedent to show that letting all domestic auto corporations fold, merge, or be sold off to the highest bidder can be A-OK, it's the example that the UK has set. So far, they're doing OK without domestically owned auto production.
Posted on: 2008/11/13 2:12
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re: GM bailout Ughhh...whether to let the "big 3" go bankrupt with no chance of recovery or extending a government loan to "the big 3" to prolong the misery... It's like a discussion about whether diarrhea or vomiting is more pleasant. The free marketer in me says "good riddance" to GM, Ford and Chrysler. In principle, the strongest survive and the weak and dumb die. The pragmatist in me knows that it's not a good idea to let Michigan implode and to cede the art and science of auto manufacturing (the most technologically advanced manufacturing techniques, bar none) to corporations based in other countries. It's a big dilemma that requires a wise executive decision. Given that the industry is on the cusp of a technological renaissance, my gut feeling is that keeping GM and Ford around is a good idea for now... no matter what it takes. Even government intervention. I'm open to brighter ideas, though. Please enlighten me.
Posted on: 2008/11/13 2:01
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I'm with you MrWolf. There are many unknowns in the dismal science known as economics. But the people (i.e., supply-siders) that keep on calling for tax cuts, tax cuts, tax cuts are starting to sound like Gus(?) in "My Big Fat Greek Wedding" to me... No matter if it's a cut or wrinkles or aching or flatulence, Windex will cure it! Objectively speaking, the economic malaise of the late 70's (inflation, stagnation, low productivity) are much different the the problems now (risk of deflation, good productivity, credit crunch), so it stands to reason that since the diagnosis is different, the cure may be different. Windex (tax cuts) may work now, but probably a different cure/treatment is called for.
Posted on: 2008/11/7 19:58
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OK, OK! It was just a one-liner! In actuality, I know that people in finance aren't incompetent or evil. The people involved in mortgage securities simply made in inadvertent mistake. It happens in all professions: the medical field, engineering, construction, etc. The unfortunate part of the financial sector implosion is that it affected so many people...hundreds of millions of people. In that respect, the failure to properly assess risk in this instance was uniquely catastrophic. As for Fannie Mae and F. mac... we're all aware of the gov't's role in their failure. People of all stripes understand that. But if you're holding on to that example and excluding all the other data, then you're simply picking only the data that fits your views; you may be an ideologue.
Posted on: 2008/11/7 19:50
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That's cool. I and several million Americans have a bunch of enemies in finance. And we don't really care what they have to say right now.
Posted on: 2008/11/7 0:05
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Putting on myself in Cankicker's shoes (and "thinking cap"), I would say: SLyng, Is it coincidence that all this happened after Hussein Obama announced won the Democratic nomination for President? I think not. I voted for Bush in 2000 and 2004, I did my duty and I don't deserve any of this. Just wait...bad times a comin'
Posted on: 2008/11/6 13:04
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It's been nice chatting with you all. Well, most of you, anyway.
I'm getting ready to vote and y'all know who I'm voting for. But whoever wins, I take solace with the fact that both men, replete with their strengths and weaknesses, are far more capable than either Kerry or Bush II. Either way, we win. Whatever misgivings one may have about McCain, one simply cannot doubt his love of country and his record of service to our country is largely beyond reproach. He also has an ability to think for himself which is evidenced by episodes of breaking with his party when he deems necessary for the better interests of our country. He has also shown an ability to "reach across the aisle" to get things done, surely a good skill for any president. He would make a fine leader. Senator Obama's record is shorter, but he too has proven to be up to the task. His detractors point out that he's a smooth talker...an insult that was never leveled at Bush II and sometimes leveled at a certain great president I remember as a child: President Reagan. And win or lose, his leadership, strategic vision and tactical prowess in running a successful $600 million campaign over the past year can not be overstated. He too would make a fine leader. But even if you don't agree with the crap above, the great thing about our country is that ultimately the fate of our country and ourselves really lies in our hands - not the president's. There aren't to many countries where you can say that, so in my mind, it's all good. Happy election day.
Posted on: 2008/11/4 3:23
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stani wrote: Quote:
Posted on: 2008/11/4 2:40
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sinik wrote: Quote:
Posted on: 2008/11/3 4:55
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I will definitely agree with you that there is a lot of blame to go around. It's true that there was some pressure at the governmental level to extend loans to people who previously wouldn't have qualified. That is a systemic problem that some would argue could have been avoided. I can forgive this for two reasons: 1) The intention to make mortgages available to more people was a good one. Many champions of an "ownership society" wouldn't even argue with the intention. The results as we have seen were obviously disastrous for everyone involved, but some things are proven only with testing. Now we all know that there is a fraction of the population that don't meet certain credit standards that simply should never have the responsibility of paying for a home. 2) Although the governmental role in extending loans to unqualified individuals was one cause of the financial meltdown that we just witnessed, it is generally agreed that it was only one component and not the root cause. There were hundreds of thousands of people that bought homes on the pretense that they thought that property values could only rise. People that technically qualified for loans, but simply overpaid for their property and of course, the speculators. Most of the blame here would be placed on the individuals involved...it's largely a case of the market over-heating; an asset bubble. But if anything, some of the blame in retrospect could probably go to the repeated Fed interest rate cuts and tax cuts of the 2000s. Too much capital floating around and the free market sequestered it in a bunch of hopeless investments. McCain actually agrees that individuals who are caught upside down are a major root cause of the problem...that's why his proposal to bail out upside-down homeowners is a key component of his financial bail out plan. That is actually one part of McCain's plan that the pragmatist in me likes. Of course on JClist, I'd be skewered for supporting a socialist, redistributionist, expensive, government-sponsored plan. http://www.sfgate.com/cgi-bin/article ... 2008/10/09/BU9B13DNI7.DTL
Posted on: 2008/11/3 2:26
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Ummm... I'm not planning on voting for McCain. Quote:
moot point. All of our taxes will be going up sooner or later whether Obama or McCain is our next president. Start saving now.
Posted on: 2008/11/2 16:20
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Trubrit wrote: It's no reason to hold McCain responsible for the financial crisis. A tight republican government has always been more cost effective than a spend thrift democratic one. Obamas plans to redistribute wealth have got nothing to do with paying off our debt. It's about sticking it to the man. Promises of free universal health care, education, hand outs....these are outright lies under present circumstances. Obama Bin Lying..just like he lied about accepting public campaign contributions. Now he's dropping millions on 30 minute ads - what a douchebag.
Posted on: 2008/11/2 16:11
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teacher wrote: Ok the work leach is too much....but the rich already pay too much. Everyone should contribute to society. Ie pay for the roads, teachers, policemen etc, not just the rich. The only cap with regards to taxes should address the total amount paid. For instance, no matter how much one makes, that individual should pay no more than 100k a year in taxes. Does this rich person use more roads, cop services, publis schools, I doubt it. Attacking the rich is not a solution, Everyone must contribute to society, ie ownership-stake. it is the same thing as owners vs, renters. Renters care less. Owners have more pride in their residences...ie the USA.
Posted on: 2008/11/1 23:32
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Oh yeah, forgot to mention that McCain isn't by far the best candidate... You see, Senator Obama happens to share a middle name with the former Iraqi dictator. But "McCain" rhymes with Hussein, so if anything, he's only a slightly better candidate. Governor Palin would've been far and away the best candidate 'cause it doesn't have any ethnic color to it and only barely resembles Putin's last name....
Posted on: 2008/11/1 23:18
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teacher wrote: Obama Hussein will destroy this country. 48% of working Americans will no longer pay taxes. Leaches on society. He will tax the rich out of the US workplace. By by jobs. O'Hussein will also have the rich contribute 68 billion in support of healthcare to the 48%.
Posted on: 2008/11/1 22:54
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TheHookJC wrote: I have said this before, the 90's were a great economic time, but Bill Clinton wasn't the only reason for these great times. He taxed the hell out of the wealthy, left office with a surplus, and then the end of the 90's into the 00's the economy started to tank. And it started during the Clinton term. The country may have been over taxed. There could have been a lot of other factors. 9/11 surely did not help the situation. I am not blaming this all on Clinton, but to say that taxing the wealthy is the answer is just false. Rather then deciding what people should be buying, why don't you leave the money in the hands of the people and they can decide what they can afford. Btw, the IRS brought in more money during the Bush Administration then it ever had in history. (even with the tax cuts) I think it is crazy to think raising taxes during this economic time will fix the problem. Leave the levels where they are, give tax credits to the middle class, and CUT SPENDING.
Posted on: 2008/10/31 12:03
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explain and give examples, because I have no idea what you're talking about. Again, I allow that The Economist is socially liberal, but all their world views and economic views revolve around the free movement of capital and the free markets and free trade. I fully agree that if you're a die-hard Republican, your security blanket should be the WSJ, but if you're looking for solid economic analysis, the FT and The Economist are right up there on the first-tier.
Posted on: 2008/10/31 2:11
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injcsince81 wrote: It is clear that there will be an open season on HENRYs ($250-$500K/year) if Obama wins. He correctly figured out that they can scream all they want but there's too few of them to make a difference at the polls (5% vs 95%). Obama threw them under the bus, calling them "rich", and the "wealthiest Americans", and offering them as sacrificial lambs to the disgruntled voters who blame them wholesale for the rising income gap and other ills. I want to see those Hollywood a-holes react to a truly socialist tax system like in Sweden or Denmark - where the top tax bracket for the multimillionaires and billionaires is like 70-80%. They'd be scurrying to Monte Carlo and Monaco like rats.
Posted on: 2008/10/31 2:02
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For the JClisters out there, I think injcsince81 is just kidding around. I can't think of many publications that are more purely free-trade, free-market, and capitalist than The E and FT. Lest I set off a stampede of subscription requests from Republican s, I must warn you all that they ARE socially liberal. (not to be confused with socialist). They're most definitely not Commies...crypto or otherwise.
Posted on: 2008/10/31 1:31
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The Financial Times endorsed Barack Obama for president
http://www.ft.com/cms/s/0/1d0b127c-a3 ... 07658.html?nclick_check=1
full disclosure: I believe FT partially owns The Economist, so it may be reasonable to consider these as one, not two endorsements.
Also these journals hail from the U.K., not the U.S., so if they endorse an American for president and he sinks our country, they don't have to deal with any of the ramifications other than having more to write about. =)
Nevertheless, both the Economist and FT are generally well-regarded publications with respected economic viewpoints.
It should also be noted that The Economist has a history of abstaining when they believe neither candidate merits one. e.g., G.Bush I vs. Dukakis. They also endorsed Dole in '96 and Bush II in 2000. They gave the weakest possible endorsement to Kerry in '04; more a repudiation of Bush II than support of Kerry.
Posted on: 2008/10/31 1:09
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Re: Barack Obama for President
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The Economist endorses Barack Obama for president.
http://www.economist.com/world/united ... &source=features_box_main It's not an unqualified endorsement, but I agree with the pro-free market Economist: Both Senator McCain and Senator Obama are risky choices, but Senator Obama has a greater upside. And while he is not by any means the perfect choice, he is the better choice.
Posted on: 2008/10/30 22:14
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Re: Barack Obama for President
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Michael Bloomberg's advice for the next prez in Newsweek:
..."Making tough choices also means deciding between a stimulus package that is focused on job creation and long-term infrastructure, or a politically popular quick shot in the arm that sends checks to Americans. We cannot afford both.
Tough choices will also require us to look at the revenue side of the ledger. The handful of old Laffer Curve fans still standing may continue to allege that cutting taxes can raise revenue in a bull market, but certainly not in a downturn. The reality is that the time when governments most require money is when people are least able to afford paying it. The reason to run surpluses during the good times is not to spend them, but to mitigate the deficits in tough times. Unfortunately, Washington squandered that opportunity by spending with reckless abandon for years. Now we have little choice but to find new revenue streams.zzz
If we have any hope of balancing the budget, the alternative minimum tax cannot be entirely eliminated. In addition, demand for revenue will necessitate bringing back the estate tax?because it makes too much sense. It will both raise revenue and encourage more wealthy Americans to donate to charity. Government should incentivize the maxim I plan to follow: "The ultimate in financial planning is to bounce the check to the undertaker."
Posted on: 2008/10/30 11:25
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Re: Barack Obama for President
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Home away from home
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Posted on: 2008/10/29 17:37
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Re: Barack Obama for President
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It's really all a matter of perspective. Some people will read this and feel bad about increasing taxes on those who earn $250K+. Others will feel terrible. Still others won't feel so bad at all...
http://money.cnn.com/2008/10/24/magaz ... _henrys.fortune/index.htm From FORTUNE magazine: "Look who pays for the bailout" Meet the Henrys (high earners, not rich yet). They make $250,000-plus and get taxed to high heaven. And they're about to get socked again. Bill Kwon is the embodiment of the American dream. His father - who was arrested by North Korean Communists in the early 1950s for championing democracy - brought the family from Seoul to Illinois when he was a baby. Bill worked himself ragged pursuing every opportunity America's heartland offered, never leaving Peoria. Just out of college, he was earning a six-figure salary at a telecom company and sleeping in his parents' basement. Now he's a wealth advisor earning $375,000 at Morgan Stanley (MS, Fortune 500), with a five-bedroom brick home, a minivan, a son in private school, and three younger kids to follow. "My dad never made more than $25,000 a year," says the burly, outgoing Kwon, 39. "When I was a kid, this was the top neighborhood in Peoria. I never thought I could live here." For all his blessings, Kwon gets really steamed when politicians and pundits claim that he and other Americans in his income group aren't shouldering their "fair share" in taxes and should pay more. Nor does he appreciate being branded as "rich" when it's far from certain he'll ever build the kind of lavish nest egg the truly wealthy enjoy, especially after the current market meltdown. "I'm not a trust-fund baby," says Kwon. "Raising taxes for people at my income level is like being punished for success, for working hard." Kwon's total tax bill is already more than $100,000, and the bite is taking an ever-rising share of his raises and bonuses, not to mention his wife's income as a photographer. Kwon fears that America risks killing the incentive for people like him by shrinking the rewards for logging extra hours or starting a business, diminishing the dream that brought his father from Korea. The Kwon family has plenty of company, representing an income group comprising five million households that earn between $250,000 and $500,000 a year and pay a large chunk of it back in taxes. These folks aren't America's hedge fund managers, investment bankers, or CEOs - who boast net worths in the multimillions and qualify as rich right now. Instead, these are the doctors, consultants, and attorneys, the marketing managers and CIOs, the owners of real estate agencies and security firms. They write the contracts, inspire the sales teams, and integrate computer systems. They own many of America's small businesses. A man aspiring to join this cohort, nicknamed Joe the Plumber, has put a face on a big issue in the presidential campaign: Whether it's fair or wise to raise taxes on the powerful job engine of America's corner stores, maintenance firms, and yes, plumbing contractors. This is the world of the HENRYs, an acronym we'll use to describe people whose financial situation can be summed up by the phrase "high earners, not rich yet." (I coined the term for a Fortune story in 2003 on the alternative minimum tax, or AMT, the bane of the HENRYs.) Put simply, the HENRYs are the bulwark of the professional and entrepreneurial class that drives the economy. Look in the mirror, Fortune reader, and you'll probably see a HENRY. They are relentless strivers. Aspiring HENRYs played by the rules and did everything right: They won the best grades in high school, got accepted at good colleges and grad schools, and worked daunting schedules as medical interns or associates in law firms. They're an upwardly mobile group: Most HENRYs used their talent and grit to advance from the middle class, and those who got a hand from affluent parents are determined to do even better for their kids. "These high earners may come from privileged, upper-middle-class backgrounds or be the children of immigrants," says Phillip Cook, a financial advisor in Torrance, Calif. "What they have in common is that they worked incredibly hard to build their careers and work incredibly hard to move ahead." Now this group of superachievers is being targeted as a cash machine. Barack Obama, the Democratic presidential nominee, has pledged to pay for middle-class tax cuts and credits by raising taxes on the HENRYs. "It's time for folks who make over $250,000 a year to pay their fair share," Obama has declared regularly on the campaign trail. Obama and the congressional Democrats frequently refer to households earning over $250,000 as the "rich" and the "wealthiest Americans." But whether the HENRYs are truly "rich," or ever will be, is debatable. In Fortune's interviews with two dozen HENRYs from Charlotte to Concord, Calif., what emerged was a portrait of families a world away from the private jets, luxury vacation homes, and heated garages with Bentleys and Porsches lined up headlight to headlight that typically represent America's vision of "rich."...[more] http://money.cnn.com/2008/10/24/magaz ... _henrys.fortune/index.htm
Posted on: 2008/10/29 4:40
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